Zynga (ZNGA) Skinned Alive as Q2 Earnings, Outlook Disappoints

Shares of Zynga (Nasdaq: ZNGA) are trading significantly lower in after-hours trading on Wednesday. The online gaming company reported Q2 EPS of $0.01, $0.05 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $332.5 million versus the consensus estimate of $344.12 million.

The company also issued very weak guidance. The company sees FY12 EPS of $0.04-$0.09, versus its prior guidance of $0.23-$0.29 and the consensus of $0.27.

The company experienced "short-term challenges" which led to a decline in bookings.

"Despite this, we're optimistic about the long-term growth prospects on mobile where we have a window of opportunity to drive the same kind of social gaming revolution that we enabled on the web," said Mark Pincus CEO and Founder, Zynga.

Investors aren't so sure. Shares of Zynga are down 40 percent. Shares of partner Facebook (Nasdaq: FB) are trading 8 percent lower in sympathy with Zynga. Facebook reports its first results as public company tomorrow.

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